(CNS): The finance minister has said that it is now “undeniable that public finances are improving”, as he hit back at the recent over-simplistic view from the Coalition for Cayman of what they believe is government’s poor performance when it comes to cutting back on public spending. In a lengthy response sent to the media, Marco Archer took the group to task over their criticisms of government’s record so far and made some important criticisms of his own about the failures of the private sector employers that have left government to pick up the tab on inadequate pay, pension and health benefits. Archer also said government wouldn’t balance the budget on the backs of the poor and the elderly.

Going through the C4C’s recent assessment of the budget, which was published in a paid-for advertorial in the Compass last week and sent to CNS and other media at the weekend, Archer made some interesting observations about the C4C’s demands that civil service benefits needed to line up with the private sector.

The minister questioned whether the C4C had any study or empirical evidence that the benefits provided by private sector employers were enough to “allow their employees to retire with dignity and not become dependent on government” or that the healthcare coverage allowed "their employees to access needed care without government assistance?”

Archer pointed out that some of the government expenditures that C4C is criticised were as a result of its moral responsibility to local people who were in difficulty, stemming from their employers' focus solely on minimizing costs and increasing profits without adequate regard for their employees and their future needs.

“At the end of the day, C4C should be realistic; not everyone can take care of themselves. If they plan to run a government that doesn’t take into consideration the most vulnerable of our society, then they have a very bleak outlook for human kind,” Archer said of the political group that many see as being a special interest group representing Cayman’s wealthier local business owners.

“In all societies there will be those who need government assistance to exist,” Archer noted in his response. “It’s something this government realises and even more, understands and fully intends to taper these benefits with welfare to work programmes as the economy continues to improve.”

He admitted that government spending as much as $18 million annually to provide overseas medical care for people who are deemed medically indigent was a significant sum but he noted why they needed the help.

“Many of those people worked their entire lives but were not provided with sufficient benefits to take care of themselves in their retirement years,” he said, adding that government had a moral and a financial obligation to care for these people.

“The Progressives government will continue to examine ways to reduce public sector costs,” he stated, but said it would do so with due regard to the consequences of those actions.

The finance minister said government, too, believes in a hand up as opposed to a hand out, but said it could not "balance the budget solely on the backs of the poor and the elderly.”

Social reform, Archer pointed out, is a multifaceted effort with intervention in several areas and it was not addressed by simply cutting off assistance to those in need.

The minister also noted the contradictions made by the C4C in their assessment of the budget and where they believed government was going wrong.

The C4C told government it needs to make provision for the unfunded liabilities it faced from pensions and health care for civil servant pensioners and to replace the budget cuts for the financial sector and tourism. At the same time it called for government to roll back fees. It also called for a massive reduction in the civil service headcount while acknowledging the damage to the economy the mass civil service lay-offs they are calling for would do, not just to the individuals who lose their jobs but to the wider economy.

“The Progressives government has been in office for a mere 8 months, yet the recommendation is to collect less revenue by rolling back fees, whilst simultaneously increasing the expenditure on Tourism and Financial Services. This is an amazing recommendation by the C4C, which we are sure is not one that the proponents employ in their own businesses,” Archer said in his lengthy response to the C4C critics.

“Government is grounded in reality and fully intends to make good on its promises of first stabilising finances and then rolling back certain fees,” he added as he pointed out it would be done systematically without putting the country in an unsustainable position of further deficits.

“It should be noted that the government managed to use only CI$2 million of the approved CI$44 million overdraft facility in the 2013/14 fiscal year. Therefore, it is undeniable that public finances are improving, costs are being reduced, cash reserves are growing. Continued prudence is what is required; not magical equations, rhetoric and grandstanding,” he added.

See Archer’s full response to the C4C’s criticisms of government’s management of public finances.

Comments (78)

I guess there will be an uproar if the Deputy Governor gets his wish and the civil servants get back their 3.2% that was taken from them. What baffles me is that people treat civil servants like they don't live and work in the same economy that they do. When civil servants took a 3.2% salary cut, don't you all think that affected their lives, their families? Some civil servants who were struggling to make ends meet before the cut were then unable to pay their mortgages, their rent, their electricity bill etc. But yet everyone is screaming that they should also be forced to pay pension and health care as well. All this will do people is make even more people become dependient on the Government for assistance through the welfare program. The Government realizes that there is no point in slashing jobs and imposing more expense on these people because whatever they save from doing that, they will have to pay it out in the form of welfare. I now C the C4C as a group of greedy individuals who portrayed themselves as a group interested in the well being of ALL caymanians but their true colours are now shining through. They are for the wealthy. Thank God not all of their candidates got in. Alden made a comprising gesture by offering Tara a ministerial seat and subsequently Winston and Roy councillor positions but be careful Mr. Premier, they might just be the tojan horse. They call for civil servants benefits to be aligned with the private sector well let me see in a few cases I know about individuals working in an accounting firm who were making $X and after pension and health care they were making $Y but yet some accountants who were working with the Government (same qualification) were not even making $Y despite them not paying pension and health. So in that case sI agree align the civil servants benefits so that would mean that if they do not pay health care and pension then they should at least be making the net salary of the private sector employees.

Thank you, unfortunately, people tend to bandwagon on propoganda, not think for themselves and continuously reprocess the same false information.

People seem to think that Civil Servants arrive from mars every morning, work, collect and then go back to their planet. They pay the same licensing fees, duties, and other taxes as everyone else. It is not like private sector workers pay taxes in the economy and Civil Servants just show their ID and walk away paying nothing.

The public sector employs approximately 6,000 workers and those workers have families. Therefore, the contribution to the economy from this group is not insignificant. It is not a welfare case as many would have people believe, Civil Servants pay and contribute to the same taxes and Government revenue that pays their salaries and benefits.

Well done C4C, you made the public aware of our islands true debt in 2013.

Untill then neither the Government nor the Opposition wanted us to know.

Now that C4C have once again reminded us, that we are on the highway to 3rd. World status.

This problem must be placed on the priority list with all 4 wheels firmly on the road to recovery. Yes Minester Marco, we appreciate your efforts, well done and I hope you continue.

Please, please do not become a politician, with your comments the other day it appears you may be heading that way. It's better to loose the next election by remaining a statesman than becoming a politician and watch these lovely Islands burn.

We all know the problems existed for many years and continue to get worse with neither Government tackling the real problems.

Take the Pension and Health bills, they were all debated, and passed into Law by our elected representatives and they both resulted in Laws that have more holes in them than Swiss Cheese.

Who benefits from them, only the employees that are hired by the companys that want to do the right thing. Employees that are not after many deductions paying their dues only to find out they have no pension, medical,then they end up going to Government.

So you see these Islands need Statesmen/Women and not more Politicians

The fat begins at the top, our esteemed MLA's have awarded themselves huge salaries and lavish pension and health care for life plans, so when the CS come for their hand outs they must get it. And when the people decide that many of the jobs that are available in our economy are below them our MLA's have to keep the gravy train going so they give them money to stay home and relax.

this behavior is going to be the ruination of or country, it is unsustainable and when the money runs out its going to be get ugly.

If you think the MLAs have it good, you need to check the heads of some of these statutory authorities. They're under the radar, getting paid more, don't have to worry about public scrutiny and critism, and also need not worry about their job every 4 years. Trust me, they're the ones who have it good.

The Government will not let the truth come out. Denial and obfuscation is their policy of the day. "We saved $600,000 a year, on interest. Love us. We will spend that money and more on printing the words "Cayman Islands" on your passports and an astroturf pitch in the Brac, but trust us when we say we have saved you lots of money".

Hello Fri, 14/02/2014 – 02:44. Marco is doing a dam good job as our Minister of Finance and now you want him to be the Premier because he would have done a better job on Hardtalk. How shallow can you be. I beg to differ as these two gentlmen are managing their post appropriately. In reference to Hardtalk, I honestly think that our Premier handled the interview extremely well. Yes, he may have started out a little uneasy but he took charged of the discussion once he got a feel of the Host agenda. I will also borrow a line from the Host 'Ethically Wrong'. It is my humble opinion, that the Host of Hardtalk was 'ethically wrong' by trying to plant words in our Premier's mouth and set a negative scene on our islands, hoping to get a nod of approval or agreement from our Primier. I along with a huge group of us are proud of how the Premier delivered himself virtuously on our behalf who calls this place HOME and we are proud of our boss.

C4C did not attack Marco as a advocacy group the aim was to highlight the debt and future liabilities of the country. The public discussion has now begun. The PPM must produce the accounts and put action behind the words by showing us the plan and not just just say a plan exists. I hope the country noted he did not deny the 1.7b in total liabilities for a country of 50,000people.

Maybe you can share it with the C4C who probably never even bothered to read it either as they were too busy attacking Marco.

Word of advice, beat up on Ozzie about the dump, he seems to be able to take it, lay off the Minister of Finance, at least he is addressing the issues and as you can see from his response, he will not take bull from anyone

We must not confuse the C4C public awarenesss and advocasy group with the 3 that they endorsed. I am more impressed with the goroup than the 3 endorsed canidates. At least we hear from the Coalition and they will take a position on something. Lets hope the push gor OMOV and a proper waste management site. Thank you C4C for the work that and research that you have shared with the public. Keep it up and dont let the naydayers worry you.

I understand your problem with admitting the $1.7 billion debt – but its true that debt exists.Marco , I voted for you but C4C's criticism is fair. Your response seems like something you are doing to appease your PPM bosses. The extreme from of socialism practiced in Cayman is a ticking bomb. An Obama style wealth transfer is gioing on here i.e Tax the finacial industry so you can give the voters handouts. That's what is going on and you know it.

Kids coming out of schools and colleges are not even close to work ready. Govt school are shambles. Ghettos coming up everywhere with young mothers living on social service. PPM by its actions are encouraging this at the cost of the financial industry who is actually funding your handouts. Marco you have studied Eco. you know what i say is true.

7.43 right on the head of the nail. However, I would also to add that every time government increase licensing fees i.e. Bank fees the banks have to either raise their fees or reduce staff. Let's face it, these companies are here to make money and ever time government raise fees, the end result everyonepays. There need to be a sustainable plan that look at growth for the country Similar to when Sir Vassell and Tom Jefferson were leaders. They did go around finding quick fixes to their budget at the time such raising taxes. They look at inward investments, increasing bank presences and so on. The modern politicians only bandaid the problem until it festers and blows.

marco your people are unemployed, losing their jobs, children hungry and the best you can offer is social services?

C4C were trying to turn the issue of public finances into a political football by pretending that nothing has been achieved or that the govt. has no plan to achieve anything further. It was a ploy simply to remind the public that they exist lest they lose relevance altogether. They got called on it. If Marco had said nothing the criticism would be that the silence is deafening. Most people are not fooled and we are also not fooled by C4C's access to multiple IP addressed to generate the impression that they have substantial public support. Go sit down.

Until reading his response I was something of a fan of Mr. Archer. His response is not only hasty and somewhat petulant, but he has revealed a lack of understanding and respect for the principles of sound financial management, the economy and the private sector.

His comments are marked by an unsettling disdain for the private sector economy (the hallmark of the last PPM administration, under which the economy of the Islands faltered).

First off, he admonishes the private sector for seeking to increase profits and reduce costs. Yet this is the very essence of entrepreneurialism and private sector investment.

Let us not forget that every single penny of wealth that is or ever will be held by every single Caymanian, and every penny spent by the Cayman Islands government in the last hundred years, was created by the private sector.

Second, it is categorically not the responsibility of private sector companies "to provide [employees] with sufficient benefits to take care of themselves in their retirement years". Even if you believe employers have more responsibility than just paying someone a market wage (for example, paying someone a "living wage"), either way it is the employee's responsibility to save for their own retirement.

Third, it is not at all inconsistent that C4C recommends increasing the budget for promotion of financial services and tourism while cutting other expenditures. Financial services and tourism generate significant government revenue as well as jobs and other economic activity. Therefore any budget to promote these sectors is an investment likely to be repaid many times over, while most other expenditures just add to the debt. This is a critical distinction and it is extremely worrying that someone in Marco's position does not see it.

My advice to Mr. Archer would be to listen to and engage with those that are willing to take the time to consider the issues in this degreeof depth and to entertain the possibility that they may have a point, instead of putting his hands over his ears and yelling "la la la la la la la".

Hey c4c stooge, first rule of holes, when you are in one, quit digging. Just accept that you guys had your behind handed to you and move on, live to fight another, try to find some graciousness in defeat.

It is not an attack on the private sector, it is saying to the C4C who purports to represent the private sector that look, Government cannot be looked at in the same way as a private business. If that was the case, you would not have a police service, a fire service or even a judiciary. None of those entities are profitable, millions go into them every year and they are not revenue earners. Government exists to provideservices to its citizens (not just social services) but security, healthcare, law and order, education and all the others.

The private sector needs to realize that, it is not all about “if it is not making money get rid of it”. It is slightly more complex. Until you are put in charge of it and have to consider the policy decisions which have major tangible real impacts on people’s lives, it is difficult for one to appreciate.

That is not to say that the private sector should not have an opinion. But let’s be fair, if the C4C was truly interested in helping Government, is a two page advertorial in the local press criticizing the Government the best they could come up with? Three of their members are a part of the Government, I am sure they have contact with them, could they not have engaged the Government in another forum with a useful set of suggestions or even some questions that gave pause for thought? They could, but I guess that would not give them the publicity they were seeking and would not have gotten James on TV. The C4C is desperately trying to stay relevant and their attack is nothing more than a political stunt plain and simple.

In only 8 months Archer has become a seasoned politician! Yup? He can't cut spending and says the people need him? Ugh! What we need is better value for money and to stand on our own 2 feet. Get people off welfare and into jobs.!!

Yes , that means actually denying a work permit (or gasp, a qualified Caymanian applied for someone's job that is a work permit renewal!? ). Our unemployment rate is tied to 7 year permit blessings …period.

The fee for one work permit is pennies compared to $$ on social services, but someone has to have the balls to offer the best education and work ethics so out locals can get the good paying expat jobs. Stop "feeding the people" intead of offering them work.

here is an idea. Cut the CS by 10% lottery at all levels. Then deny 10% of white collar work permits. Until we stop the Govt bloat and get locals into the private sector our problems will only multiply (and Archer and Politicians love for us to rely on them… Just say no )

I don't think that people have any issues helping the most vulnerable, sick and elderly, however, I have an issue when people are supported who have their priorities screwed up and continue breeding (yes, there I said it) when they dam well know they can't afford any more kids or have no interest in being a parent!

Government needs to ensure that the help goes where it is really needed, and that process fails time and time again, whether it is social services, medical expenses or scholarships. That is what is rubbing people the wrong way! The constant favor given to someone, who knows someone, who knows someone needs to stop!

People who are "poor" but drive big fat SUVs, get their nails done and smoke don't need any help unless they have given up their SUV, their acrylic nails and their cigarettes………..

I can understand the nails and cigarettes but if you have a suv what do you propose they do with it? walk instead of drive? it's not like anyone will buy it if they try to sell it. and if they have a cigarette habit, they would need something to help them get off it. Believe me a cigarette smoker is like a cocaine addict, they'll kill for a cigarette.

James is too busy choking on the fumes from the dump fire next door to smoke anything! Nor is that going to change anytime soon given Ossies view that the cost free solution in his lap has to be ignored because it will annoy his constituents and screw the rest of us.

Classic politician response from Archer – deflect the criticism by claiming the critic asked for something abhorrent – read Bergstrom's letter – he says we need to ensure there are resources for the truly indigent by excluding the free riders and the wasteful expenditure. Nothing to do with financing it off the back of the indigent and pensioners, quite the opposite. If he does not make fundamental changes, there won't be any money for those people – all spent on keeping thise on the inside fat and happy. Problem being that the free riders and the recipients of the wasteful expenditure are voters or supporters of the government, and those paying for the free rides – the financial services and tourist industry – don't get to vote, but simply pay .

In the absence of a real opposition, C4C is about the only group with the balls to say the emperor has no clothes, but people never like to hear uncomfortable truths. Like the fact that whilst the currentgovernment are light years ahead of the last in financial probity and commonsense, they have not gotten anywhere near dealing with the core issues, and show a remarkable reluctance to do so – such as the costs of the civil service, the dump, one man one vote, gross wasteful expenditure by government, failure of tax payer funded entities to account for the money they spend or provide service …

"Cost free solution"? I suggest you go and take a good hard look at what was offered. As I recall it was a tract of land with 3 holes one of which would be lined. Thats it. Everything else fell to the country. Before that is accepted I think that other solutions need to be carefully considered.

As to empirical evidence for correctly providing health insurance and pension in the private sector…ahem Government dictates the minimum we are required to provide to employees and as individuals. So are you saying that government has not set appropriate standards? You are the ones who altered the SHIC plan last year something that was very much needed and we in private sector are required to provide that at a minimum many provide much more and so yes both employee and employer contribute at a higher rate now but for better benefits. Pensions that to is mandated by government and we must follow it or face hefty fines. Since government has failed to fund its pension adequately why should we in the private sector be penalized. It wasn't our doing that it took the government to around 1997 or around then that whoa people aren't saving for retirement best get on to that.

What is wrong with asking civil service employees to pay a portion of their benefits, simply answer that for me. This is not the elderly or vulnerable we are talking about we are talking about the work force that is way to high because of decentralization and a lack of using economy of scales and avoidance of redundant services I.e. every department has a full human resources department, purchasing department etc…. This is not a good business model.

Minister please explain, if you feel we are not providing adequate coverage in private sector for health why not change what we must provide after all you set the rules. Then please explain why civil service can't be held to the same standards and have to help fund such a benefit (although I note that it is ignored that many companies exceed the minimums required but shhh we don't want to tell that).

Also explain in detail why civil service is not on a merit/performance based salary review as opposed to blanket cola increases whether warranted or not.

These simple things go a long way to showing us in the private sector that government appreciates the fact that without the private sector you pretty much don't need the vast majority of the public sector

…and why isn't there a Means Test for the shameless rich parents of kids who are given scholarships to top universities (even St Matthew's); as well as for those who receive all the Social Service benefits, yet have lots of family assets?

Over all a very good response, they only point i am not sure about is in paragraph 6. People will always need assistance from Government, yes there are very few who will need assistance, the problem is right now there are thousands collecting from government, i know about 25 of this group, who dont want to go to work becuase Gov are providing them with free rent, free electic and water, free coupons for food and approx $1000 per month in extras…. they are persons who are able to work but have verbally told me why should they, they are Caymanian and Government will pay me to stay at home… OH and also paying for there young kids day care…

So yes there will be smepersons ho need assistance,however there are probably1000's who re taking advantage.

Again over all ver ood rely, now lets wait for the C4C's reply… this is goingto be a fun one!!!

Undeniably getting better? How is this possible? Government owes over 1/2 million dollars in overtime to the Fire Men, not sure if this is true, but it is said that government owes MILLIONS in back pension???? Please explain..

Yes, but they owed all of that already. What Marco is saying is that 'we already owed a lot, but we haven't added to the problem yet and have in fact paid it down slightly'. And no, they don't owe back-pensions. What they have is a pension liability going forwards. Basically there are pension guarantees but successive governemnts have not put aside the money now to build up enough money over time to pay what will be owed when it comes due. So this (and the last) and future governments need to make sure to put aside money every year so that in 5-50 years time, as the money that past governments committed to provide is needed, it will be avialbale. Its sort of like the bullet payment at the endof the loans that previous government's committed to paying.

What point?! These C4C critics better sit down and review their replies to the minister. They can TALK ALL THEY WANT but Marco Archer ACTS AND KNOWS FIRST-HAND WHATS GOING ON … that's the hugh difference.

Marco, trying to explain public policy to the C4C is like trying to explain the internet to an ant. they are a bunch of arm chair quarterbacks, there is no way they can get a perspective on the real world or the common man from that high in their ivory towers.

It is about time someone of intellect and human understanding responds to and sends a clear message to C4C (and the Private Sector) with broad shoulders. Mr. Minister (Marco) you are headed in the direction in this 21st centry as one of the finest politicians that theses Cayman Islands has seen and is very much in need of. My next son will be named Marco Archer!

Come on Archer…nothing is happening in Cayman…business are going under, people losing jobs…so you didnt use up youroverdraft allowance…so what….please have your government do something to bring back the economy. Stop wasting time on the cruise docks and airport & playing fields in sister islands….do something that will have impact NOW.

C4C should think twice before coming out with their stupid suggestions. Please try to educate yourselves on the facts before making yourselves the laughing stock of the country.

The progressives laid out their plans for the country, They cannot do everything all atone time, they have only been in power for eight months. It is not magic as the minister of finance stated, it takes planning and sensible actions. Mr. Bergstrom left no stones unturned in making a real ass of himself. please show us what you and your company has done lately for the betterment of the citizens of the country.

There's certainly no question who occupies the moral high ground when it comes to good intentions with C4C's figures for Government's pension liabilities and unpaid and unfunded retired civil service heathcare costs at $860 million. Meanwhile, over at the Turtle Farm and Cayman Airways et al…

Please share with us a set of Audited accounts as evidence of progress that will end the debate. A decade later and government still cannot produce a comprehensive set is a utter disgrace just ask the Auditor general.

Seriously? this is the card you pull? there are 12 months in a fiscal year, the Government has only been in office for 8 yet you already want a set of audited accounts on their performance, desperation setting in it seems, the audited accounts bit has been way overplayed my friend, even Swarbrick explained things are getting much better.

Thank you Minister Archer, just goes to show how idiotic the C4C is in their analysis, it is akin to Ezzard claiming to cut $70 million on the back of an envelope in his one man Finance Committee.

All these people are full of piss and vinegar when they are on the outside looking in, it is always so easy to say, do that and do this. Once they get in, they gain a whole new perspective, ask Roy and Tara and Winston and all the other members how much more educated they are now in Public Administration since taking Office.

C4C should have a few of their members volunteer to sit down with the Government and work on solutions rather than stay in the dark and take pot shots. Maybe that way, they can get an education and actually make intelligent comments.

As others have previously noted, the C4C is clueless in their understanding of public finances, they believe that by picking out a few numbers and throwing it out there, they would come across as financial experts parting the red sea and showing the people the way.

Things are not as isolated as the C4C would have the public believe, you can't simply go in like Jack the Ripper and start cutting scholarships, assistance to the needy and sick, employment for Caymanians etc. without some negative consequences.

At the end of the day, Government does not exist to make a profit, it exist to provide services to the people, you can't take a ruthless mentality to Public Finances, it simply does not work.

Your comment sadly is our problem. The Govt needs not service $$$ the people if the people provide for themselves. The Entitlement factor will be our downfall. We must stop the mass welfarare Mr Archer! You only want people to rely on Govt so govt can grow (and be re-elected). We SAW this for decades in Detroit…corrupt politicians,claiming to be the poor man's friend, and look how that once great community failed. Do not blindly ask for the handouts people. Your education system will fail and the Govt will bloat itself into failure.